Most of the Empirical Research on Long-Run Costs Suggests That

question 19

True/False

Most of the empirical research on long-run costs suggests that the long-run average cost curve for most firms has a very pronounced U-shape.

---

Definitions:

Net Profit Margin

A profitability ratio calculated as net income divided by revenue, indicating how much profit a company makes with its total sales.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.

Times Interest Earned

A ratio that measures a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes by the interest expense.

Debt-To-Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.